Pacer Athletic Shoes (“Pacer”), a Baltimore-based small shoe manufacturing company, was observing continuous drop in its sales, particularly, since it had disrupted sales of its successful product ‘Pacesetter’ instead introduced a new range of shoes ‘Pacesetter Plus’.
Pacer was an initiative of a former marathoner, ‘Henry Carson’ who set it up with an objective of serving runners across the globe by producing comfortable athletic shoes. The journey from a simple idea to a $10 million company was majorly possible due to strong athletes’ section loyalty for Pacer products.
In early 1991, booming athletic shoe market attracted larger players leading to heavy competition. Some of Pacer wearers were also lured by flashier shoes of these industry giants leading to dip in Pacer’s sales figure. Facing such a fierce competition, Pacer decided to upgrade company’s offerings each season. As part of this umbrella decision, Pacer upgraded Pacesetter line by launching its new product ‘Pacesetter Plus’ and discontinued the successful ‘Pacesetter’. However, new product was not welcomed as anticipated and Pacer faced criticism from some old loyal customers leading to a further fall in sales. This became a major reason of concern for Pacer team.
Write 1200 words case analysis on given case study"‘When New Products and Customer Loyalty Collide"